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inflation? Recession? US spending plans ushering in Black Friday

Pedestrians look at holiday windows at a Macy’s Inc. flagship department store in the Herald Square area of ​​New York, US, on Thursday, December 2, 2021.

Bloomberg | Bloomberg | Getty Images

Americans are not planning major cuts in holiday spending this year despite inflationary fears among most consumers and the risk of a recession, according to an annual poll conducted by CNBC and SurveyMonkey ahead of the first big purchase. Peak season weekend.

Two-thirds of Americans (67%) are worried about inflation making it difficult for them to buy the goods they like. Even more (69%) worry that the recession will limit their ability to make purchases. But the expected cut in spending among consumers is only slightly higher than last year – 39% versus 36% – with a majority of Americans saying they expect to spend less this year (44%) or more (14%), annually according to CNBC | Survey Monkey Small Business Saturday public opinion.

“People are pretty consistent in how much they expect to spend on holiday shopping,” said Laura Vronsky, senior manager of research science at Momentive. “Things are going to get costlier and you have to admit that there is no secret way to avoid high inflation,” he said. But she cautioned that there remains a risk of change in consumer behavior even after shoppers evaluate prices. Vronsky said, “The intent may differ from the outcome. They’ll see some sticker shock out there and find that their budget won’t go as far as in previous years.”

Survey results reveal consumer divides in the economy, with spending concerns more prevalent at lower income levels.

Seventy-eight percent of households making less than $50,000 are concerned about their spending power amid inflation this holiday season, with that figure dropping to 56% for household incomes of $100,000 or more.

Economic anxiety is also relatively high among young Americans, with 73% of those 18-34 worried about being able to buy what they want because of inflation, the most among any age group in the survey.

The data on inflation matched concerns in last year’s survey regarding supply chains that had broken down at the time.

“Inflation is playing the role of the supply chain saga this year,” Vronsky said.

The SurveyMonkey online poll was conducted November 9-13, 2022, among a national sample of 3,549 adults.

The National Retail Federation predicts record sales for the first holiday shopping weekend starting with Black Friday earlier this week, with eight million more shoppers (166 million) expected this year than last year, and more than 2017. highest level since.

Some recent earnings reports from retailers demonstrate a resilient consumer. Best Buy reported third-quarter results that exceeded Wall Street’s expectations and said it expects holiday spending to resemble the historic holiday period, with customer shopping activity peaking during Black Friday week, Cyber ​​Monday and two The week runs till 25 December. Fitch said this week it is “cautiously optimistic” about holiday sales.

But the concerns of young consumers are also reflected in the recent retail sales report. Urban Outfitters CEO Richard Henne said on its earnings call earlier this week that the company raised prices at its stores “more than it should have” — it has a younger consumer base that is more exposed to inflation. American Eagle Outfitters’ CEO said on its earnings call to expect “a highly promotional holiday season.”

Retailers are expected to offer some pretty big discounts to move inventory starting with Black Friday.

“Inflation and recession are tied together and both are top of mind for consumers, but habits are sticky,” Vronsky said. “It’s that time of year when you’re expected to shop and spend more than you need to. … That’s the main takeaway. They’re not making major changes despite the fact that they worry about a recession.” And we’re in a high inflation environment.”

A CNBC|SurveyMonkey poll finds that with many consumers spending habits consistent with the past, sharp changes in shopping patterns due to the pandemic, such as e-commerce versus in-store, are settling into a new normal.

Here are some more key findings from this year’s survey.

Black Friday Is Still the No. 1 Shopping Holiday

Surveys consistently find that the hype around the shopping holidays often exceeds genuine enthusiasm among consumers. More than half (55%) of survey respondents did not plan to shop on Black Friday, Small Business Saturday or Cyber ​​Monday. Last year the figure was 52%.

But Black Friday remains the No. 1 shopping holiday that Americans say they’ll spend. One in five (21%) are “most excited” to shop on Black Friday, nearly double the number of consumers planning to shop on Cyber ​​Monday (12%). Small Business Saturday is a distant third at 7%.

For small businesses, the concept of a holiday shopping day is more difficult to convey because there are many different types of businesses that fit under the Main Street umbrella, Vronsky said, ranging from local bookstores to restaurants and Less coordination of discounts is possible than with many other types of retail, and the likes of big box retailers.

The number of holiday shoppers who plan to patronize a small business on Small Business Saturday has plummeted over the past four years, down from 44% in 2018 to 28% this year.

Amazon and Small Business Saturday Spending

The gains made by e-commerce may have contributed to a permanent decline in Small Business Saturday shopping interest, which is at a four-year low. But it has also contributed to more small business purchases being made online, with the percentage of Americans planning to shop online from a small business this year doubling from 9% to 18% over the past four years, while those who say Those saying they would patronize a small business individually declined by 10% (from 58% versus 48%). More than one-fifth (20%) of consumers planning to spend at small business during the peak pandemic year of 2020 said Saturday they would shop online, a result this year of lasting gains for Main Street e-commerce. give hints.

A connection between the Amazon threat and Main Street conflicts, meanwhile, is not in evidence in the survey results. Two-thirds of US adults (66%) say they have an Amazon Prime subscription, roughly unchanged from last year, but they are more likely to say they’ll spend on Small Business Saturday (33%). That’s nearly double the number of consumers who don’t subscribe to Amazon Prime (18%) and plan to shop at a small business on Saturday.

“We always hear about the threat of the Amazon but we’ve never seen it play out like this,” Vronsky said. “It shows up in some of the data in other ways, and Amazon is taking business away, but at the same time people who are buying from Amazon are also buying from small businesses at higher rates,” she said, a factor one of Amazon’s There is a correlation between Prime subscriptions and higher wealth levels.

E-commerce profits have slowed but are here to stay

It’s been a tough year for technology companies that will continue to accelerate gains made during the pandemic as Americans’ behavior has changed drastically. Not so, but the gains made by e-commerce seem to be settling into a sustainable position.

More than half of shoppers (51%) say they prefer to do holiday shopping in person, compared to those who shop online (47%). Those figures are unchanged from last year, according to SurveyMonkey, but they mark a significant change from pre-pandemic years. In 2018, 61% of holiday shoppers said they preferred to shop in person, while 37% said they preferred to shop online.

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